Everyone Wants to Buy Your House. And it’s Worth More than a Year Ago!

We are seeing a gradual increase in the prices of homes in areas that have been most affected by low inventory. This could be an indicator the housing market has finally pulled out of its slump. We’d like to think so. But we’ve been burned before. We’ll say we are cautiously optimistic.

List Prices Have Increased, But Inventory Remains Low

Housing inventory across the country is down. If you’re in the real estate business you probably know this. If you aren’t, it might come as a surprise; there are simply fewer homes going on the market than there were a year ago, or even two years ago.

At the same time, housing prices have not dramatically increased. With fewer homes on the market, list prices should rise as more people compete for a smaller amount of property.

It’s a head scratcher. CoreLogic has a theory for one part of the problem. Economists at the Californian company argued price declines are keeping sellers off the market. The company found the supply of homes for sale drops as the number of homeowners who owe more than their houses are worth rises.

“The presence of negative equity not only drives foreclosures, reduces the availability of purchase down payments and impedes refinances, but also restricts the ability of owners to list their homes for sale as the demand side of the market improves,” CoreLogic wrote in its most recent economic report.

Recently, Movoto Real Estate researched the 50 largest cities in the country to see just how low inventory has dropped in the past year and whether list prices have truly remained flat. What we saw was in cities that have been most affected by low inventories, list prices are starting to creep back up.

Below are five cities that have been hit hardest by the inventory decline. To come up with the figures we looked at the current inventory in each city as of June 19 and compared this figure to a year ago.

Las Vegas, NV
Compared to this time last year, inventory in The Entertainment Capital of the World is down 66 percent. At the moment there are 3,278 homes on the market–a far cry from the 9,704 homes on the market a year ago. According to our data, inventory has dropped steadily since July, 2011.

San Francisco, CA
Inventory in San Fran is down 65 percent compared to last year and 66 percent compared to the year before. Right now there are 693 houses on the market. A year ago there were 1,885.

Miami, FL
Miami’s inventory has been hit hard. There has been a 62 percent decrease in the number of homes on the market compared to this time last year. In 2011, there were 13,767 homes on the market, compared to 5,274 on the market at the moment.

Fresno, CA
Compared to a year ago Fresno’s inventory dropped by 52 percent. In 2011, there were 1,583 homes on the market. Currently, there are 753. Just as interesting, Fresno’s inventory has dropped even compared to six months ago. Six months ago there were 1,267 homes on the market.

Oakland, CA
In the past year inventory in Oakland has dropped dramatically. Today there are 626 homes on the market. This time last year there were 1,245 homes on the market. This is a 50 percent decrease.

Supply, Demand, and Median Price, Oh My!

This is only the tip of the iceberg. In nearly all of the top 50 cities, inventories declined. If we believe the data, this indicates that nationally, it should be a sellers market. In other words, more people are competing for a smaller set of houses. With more people competing for housing, the median list price of each house should, on a theoretical level, increase. In some areas this held true. In others it didn’t.

Below are five cities with an inventory shortage that have seen an increase in the median list price of houses on the market.

Las Vegas, NV
In the past two years Sin City has seen a large increase in the median list price of homes for sale. Compared to a year ago the median list price is up 40 percent. Compared to two years ago the median list price is up 48 percent. This is a gain of $48,950 in the past year. Maybe it’s time to take a gamble on the market.

Phoenix, AZ
A year ago the median list price of a house in Phoenix was $109,000. Today the median price is $142,000–up 30 percent. More telling, the list price is up 18 percent compared to two years ago. In the past year the median list price has increased $33,000.

Mesa, AZ
America’s table has seen serious improvements. Compared to two years ago, the median list price of a house is up 10 percent. Compared to a year ago, home prices are up 25 percent. This means the the list price has increased by $29,373.

Miami, FL
Miami’s median list price has steadily risen in the past two years. It’s up 30 percent compared to two years ago, 23 percent compared to a year ago, and 14 percent compared to just six months ago. The current median list price is $245,000. In the past year, Miami list prices have gained $46,000.

San Francisco, CA
The Giants’ home turf is up 11 percent compared to two years ago and 19 percent over last year. Something we find extraordinarily interesting is the median price range of a San Fran listing has significantly increased. The current list price is almost a quarter higher than it was six months ago. Overall, in the past two years the median list price has increased by $126,000.

The Take Away: Hold Your Horses

We are seeing a gradual increase in the prices of homes in areas that have been most affected by low inventory. This could be an indicator the housing market has finally pulled out of its slump. We’d like to think so. But we’ve been burned before. We’ll say we are cautiously optimistic.

Based on independent data from DQnews.com which provides info to all news media. Vegas isnt up 52%.. put up by 2%, mostly seasonal buying like many other metros.
As for Miami, new homes down as well.. resale up but again…seasonal.

Two problems with your comment:
1. That DQNews report is using April data. We are using June 19th data. DQNews is not a brokerage, so their data is delayed by a significant margin.
2. DQNews is using Median *Sold* Price. We are using Median *List* Price.

As a brokerage, our data is more accurate and more up to date than independent data from 3rd party aggregators.

The inventory in Las Vegas is dramatically down (resulting in the median list price going up significantly – primarily due to “traditional” sellers) due to a New State Law called AB284 that went into effect on October 1st, 2011 making it harder for banks to foreclose on properties.

Therefore… the amount of REO homes has declined significantly (just a little over 500 REO homes currently available on the Las Vegas MLS) and homeowners that have not been paying their mortgages — really have no incentive to short sale their homes right now since it’s going to take a long, long time for them to be foreclosed on.

A couple of years ago.. It might have taken six months for a lender to foreclose on a property in Las Vegas. Today — estimates are at over two years.

There is NO shortage of homeowners not paying their mortgages in Las Vegas.

When the banks will ever catch up and start foreclosing on Las Vegas properties again is the big wild card in play right now.

By the way… Appraisal issues are popping up left and right all over Las Vegas right now. If you are not a cash buyer in the under $200K price range — Good Luck!

Multiple offers on day one for anything decent that comes up for sale… I’ve even gotten into Bidding Wars on properties over $500K. Pretty crazy right now…

For Las Vegas homeowners — it’s a great time to sell right now since the increase in prices is probably only going to be a temporary thing while the banks figure out how to foreclose with new law in place.